Anaya Nolan
The first regulatory law can be traced back to ancient civilizations in Egypt, India, Greece, and Rome, where standardized weights and measures existed. In China, a national currency system was in place, and paper currency was invented. However, modern industrial regulation emerged in the 19th century, with the Railway Regulation Act of 1844 in the United Kingdom, addressing the rapid development of the railroad industry and the threat of monopolies. In the United States, the first federal regulatory body was created over 130 years ago, and the Administrative Procedure Act, passed in 1946, is considered a significant milestone in regulatory reform.
| Characteristics | Values |
|---|---|
| Name of the law | Administrative Procedure Act (APA) |
| Year of passing | 1946 |
| Reason for passing | To balance the competing goals of bureaucratic expertise and legislative accountability |
| Regulatory body | Interstate Commerce Commission |
| Regulatory scope | To constrain railroad rates |
| Regulatory approach | Regulations need to be grounded in statutory law and an administrative record that includes public notice-and-comment |
| Historical context | The first cases of regulation occurred in the late 1870s with regard to the railroad industry |
| Country | United States |
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What You'll Learn
The Administrative Procedure Act
The APA establishes how federal administrative agencies make rules and how they adjudicate administrative litigation. The act requires that regulations be grounded in statutory law and an administrative record that includes public notice-and-comment. It includes requirements for publishing notices of proposed and final rulemaking in the Federal Register, and provides opportunities for the public to comment on notices of proposed rulemaking. The APA requires most rules to have a 30-day delayed effective date.
The APA addresses other agency actions such as the issuance of policy statements, licenses, and permits. It also provides standards for judicial review if a person has been adversely affected or aggrieved by an agency action. The APA's provisions apply to many federal governmental institutions and agencies. The APA defines an "agency" as "each authority of the Government of the United States, whether or not it is within or subject to review by another agency", with some exceptions, including Congress, federal courts, and territorial governments.
The APA's basic purposes, as outlined in the Attorney General's Manual on the Administrative Procedure Act, are to require agencies to keep the public informed of their organization, procedures, and rules; to provide for public participation in the rulemaking process; and to establish uniform standards for the conduct of formal rulemaking and adjudication.
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Interstate Commerce Commission
The Interstate Commerce Commission (ICC) was the first regulatory commission in the history of the United States. It was established in 1887 by the Interstate Commerce Act to regulate the railroad industry, which was rapidly developing throughout the 19th century. The commission was created to address mounting public indignation against railroad malpractices and abuses, particularly the issue of rate discrimination between similarly situated customers and communities. Western farmers, specifically those of the Grange Movement, were a dominant force behind the agitation for regulation. The ICC's original purpose was to regulate railroads to ensure fair rates, eliminate rate discrimination, and regulate other aspects of common carriers, including interstate bus lines and telephone companies.
In the years following its establishment, the ICC's jurisdiction was gradually extended beyond railroads to all common carriers except airplanes by 1940. Its enforcement powers to set rates were also expanded through statute and broadened Supreme Court interpretations of the commerce clause of the Constitution. In 1934, Congress transferred the telecommunications authority to the new Federal Communications Commission. The ICC's authority was further extended in 1935 with the Motor Carrier Act, which allowed it to regulate interstate bus lines and trucking as common carriers.
The ICC played a significant role in enforcing U.S. Supreme Court rulings that required the desegregation of passenger terminal facilities in the 1950s and 1960s. Notably, in 1955, the ICC banned bus segregation in interstate travel in Sarah Keys v. Carolina Coach Company, extending the logic of Brown v. Board of Education to bus travel across state lines. The ICC's safety functions were transferred to the Department of Transportation in 1966, and the commission was ultimately abolished in 1995, with its remaining functions transferred to the Surface Transportation Board.
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Executive Order 12,866
Regulatory law, commonly referred to as administrative law, has evolved with economics, science, and technology. It deals with regulations, or edicts, created by an executive branch agency based on the authority given to it by Congress through a law.
In 1993, President Clinton issued Executive Order 12,866, replacing Executive Order 12,291. Executive Order 12,866 requires that significant regulatory actions be submitted for review to the Office of Information and Regulatory Affairs (OIRA) within the Office of Management and Budget (OMB). This executive order has been retained by subsequent presidents, including Trump, despite their differing regulatory rhetoric.
The future of regulatory policy in the United States remains uncertain. While Executive Order 12,866 remains in effect, the next president could easily rescind it, emphasizing the delicate balance between bureaucratic expertise and legislative accountability in regulatory law.
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Sherman Anti-Trust Act
The first federal law directed against industrial combination and monopoly was enacted on July 2, 1890, and is known as the Sherman Anti-Trust Act. It was the first measure passed by the US Congress to prohibit trusts and monopolistic business practices. The act was named for Senator John Sherman of Ohio, who was its principal author and the chairman of the Senate finance committee.
The Sherman Anti-Trust Act was a response to the trend towards unchecked consolidation that began after the panic of 1873. It aimed to reverse this trend and restore competition in the marketplace. The act broadly prohibits anticompetitive agreements and unilateral conduct that monopolizes or attempts to monopolize the relevant market. It outlaws any contract, conspiracy, or combination of business interests in restraint of foreign or interstate trade.
Section 1 of the Act states that:
> [e]very contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal.
Section 2 of the Act prohibits monopolization or attempts at monopolizing any aspect of interstate trade or commerce and makes the act a felony. The penalties for violating the Sherman Act can be severe, with individuals and businesses that violate it being prosecuted by the Department of Justice (DOJ). The act also authorizes private parties injured by conduct violating the Act to bring suits for treble damages (i.e., three times as much money in damages as the violation cost them).
While the Act was aimed at regulating businesses, its prohibition of contracts restricting commerce was applied to the activities of labor unions until the 1930s. This changed with the Clayton Act of 1914, which created exceptions for certain union activities. The Sherman Anti-Trust Act has been used with considerable success, including during President Theodore Roosevelt's "trust-busting" campaigns at the turn of the century.
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Federal Trade Commission
Regulatory law, commonly referred to as administrative law, deals with regulations created by an executive branch agency based on the authority vested in it by Congress. The first federal law directed against industrial combination and monopoly was enacted on July 2, 1890, known as the Sherman Anti-Trust Act.
The Federal Trade Commission (FTC), an independent agency of the United States government, was established in 1914 by the Federal Trade Commission Act. The FTC's predecessor, the Bureau of Corporations, was created on February 14, 1903. The FTC's principal mission is to enforce civil (non-criminal) antitrust law and promote consumer protection. It is the only federal agency with jurisdiction over both consumer protection and competition in broad sectors of the economy. The FTC pursues vigorous law enforcement, advances consumers' interests, develops policy and research tools, and creates educational programs for consumers and businesses. The FTC is headquartered in the Federal Trade Commission Building in Washington, DC, and is led by five commissioners serving seven-year terms.
In 1914, the Clayton Anti-Trust Act was passed to prohibit discrimination in prices, exclusive deals, and any action that substantially lessens competition or promotes monopolies. The FTC has been tasked with enforcing this act since its inception. Over the years, the FTC has been delegated additional authority to regulate business and protect consumers. For example, in 1938, Congress passed a broad prohibition against "unfair and deceptive acts or practices," and the FTC was directed to administer consumer protection laws such as the Telemarketing Sales Rule and the Equal Credit Opportunity Act. In 1975, Congress granted the FTC the power to adopt industry-wide trade regulation rules.
The FTC has continued to adapt to new challenges in the modern economy. In July 2023, the FTC launched an investigation into OpenAI, the creator of ChatGPT, over concerns about data security, privacy practices, and the generation of false and derogatory content. The FTC passed an omnibus resolution to enhance its ability to investigate companies incorporating AI into their products. In another instance, the FTC held a workshop in July 2025 on "unfair or deceptive trade practices" in the provision of transgender healthcare, as part of the Trump administration's campaign to curtail trans rights.
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Frequently asked questions
The first federal law directed against industrial combination and monopoly was enacted on July 2, 1890, and is known as the Sherman Anti-Trust Act.
The Interstate Commerce Commission was created in 1887 to constrain railroad rates.
Regulatory law, also known as administrative law, deals with regulations, or edicts created by an executive branch agency. These are different from laws as they are passed by an executive branch agency based on the authority given to it by Congress through a law.
